Trump’s India tariff impact has been sending shockwaves through global markets right now, as President Donald Trump actually announced a 25% tariff on Indian imports effective August 1, 2025. The Indian rupee was weakened to 87.95 against the dollar, and this prompted the Reserve Bank of India to sell an estimated $3 billion to prevent currency collapse.
Rupee Falls as Trump India Tariff Spurs RBI Move, De-Dollarization Surge
The Rupee vs Dollar exchange rate actually plummeted following Trump’s announcement, which cited India’s military and energy cooperation with Russia as justification. The RBI Dollar intervention was swift and also substantial, with two separate market interventions conducted at 87.95 and even at 87.60 levels.
A dealer at a state-owned bank stated:
“The RBI might have sold $2.5 billion-$3 billion. Rupee will gain around 20 paisa more, where RBI will buy dollars. There is two-way intervention.”
Indian Export Tariffs Drive Trade Policy Shift
The announcement of Indian export tariffs actually represents an escalation from the previous 26% rate that was imposed in April. India is among the top sources of US imports right now, with nearly $90 billion in goods that flowed last year. Apple alone exported $17 billion of iPhones from India.
Trump stated on Truth Social:
“While India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.”
De-Dollarization Trend Accelerates
The Trump India tariff impact has actually accelerated the de-dollarization trend across emerging markets. India has permitted 18 countries to transact in rupees instead of US dollars, including Kenya, Sri Lanka, and also Singapore. The RBI Dollar intervention along with Indian export tariffs signal a broader shift away from dollar-dominated trade systems.
The rupee was recovered to close at 87.48 per dollar after the central bank’s aggressive response. With the Rupee vs Dollar volatility expected to continue until the August 1 deadline, the de-dollarization trend appears to have gained irreversible momentum as countries seek alternatives to dollar transactions.